204 USPQ

respected. Although at one time the AEC was unable to locate the whereabouts of one of the copies of P-103, the evidence showed circumstances which indicated that this copy may have been destroyed. To be sure, there was no credible evidence which establishes as a fact that P-103 was seen by anyone except those persons having legitimate authority to see it. We think, therefore, that the evidence is insufficient to establish a breach of any express or implied reasonable precaution requirement. even if such obligation existed under any contract theory, including a bailment theory.

B. Fifth Amendment Taking

Radioptics' second theory of liability is that the Government. through the AEC. has taken its private property for public use without just compensation. in violation of the fifth amendment to the Constitution of the United States. Specifically, Radioptics argues that by declassifying the contents of a patent application of another party (the Levy, et al. application), which disclosed subject matter virtually identical with that of P-103 while maintaining the process disclosed in P-103 in a classified status. the AEC had destroyed the property value of P-103 when the Levy, et al. patent applica tion issued as a patent. thereby divulging the entire substance of Radioptics concept to the public and also giving the owners of the Levy, et al. patent a position of exclusiveness and competitive advantage over plaintiff.

over

Radioptics also urges that declassification of the Levy, et al. application gave its owners a competitive advantage Radioptics, since the owners of the application were not under restraint and Radioptics, on the other hand, was prohibited from disclosing the contents of its proposal.

Assuming that P-103. prior to classification, was "property" within the meaning of that word as used in the fifth amendment. and assuming further that the "property had value at that time, the issue is whether or not, under the facts recited above, there was a "taking" of that property.

The law is well established that not every interference with or encroachment upon a private property right by the Government is entitled to compensation under the fifth amendment. Only when there is severe dimunition in the value of the property or physical possession. use. or destruction there of will compensation ordinarily be awarded. See Mosca v. United States. 189 Ct. Cl. 283, 289-90, 417 F.2d 1382. 1385-86, 163 USPQ 637, 638-639 (1969), cert.

877

denied. 399 U.S. 911, 166 USPQ 65 (1970); De-Tom Enterprises, Inc. v. United States, 213 Ct. Cl. 362 365, 552 F.2d 337, 339 (1977).

In the present case, classification of P-103 did not prohibit use of the contents thereof by Radioptics, but merely imposed security restrictions on disclosure of its contents to others as mandated by statute and duly promulgated regulations. Specifically, Radioptics was required to modify its safe and to install an alarm, but then only in the event that it wished to retain and store the actual document or copies thereof on its premises. Radioptics was, in any event, prohibited from discussing the detailed contents of the proposal with persons outside of Radioptics without first obtaining permission from the AEC. (Even this restriction did not apply to discussions of a general nature.) To be sure, Radioptics could have conducted the research proposed in P-103 on its own; it could have applied for a patent directed to the process disclosed in P-103; and it could have solicited funds from private investors to help pay for any of these activities, all while P-103 remained classified. Thus, the mere fact of security classification of P-103 did not prevent Radioptics from protecting or enhancing the value of its property. Radioptics solicited the financial aid of defendant to carry forward its research and development, reserving for the anticipated formal contract the terms and conditions under which defendant could duplicate, use, or disclose the submitted data. However, no such formal contract was ever executed. We find this level of interference with Radioptics' property rights, if any, in P-103, insufficient to constitute a taking under the fifth amendment for which Radioptics would be entitled to compensation.

The Supreme Court was presented with an analogous set of facts in Goldblatt v. Hempstead. 369 U.S. 590 (1962). Petitioner challenged a regulatory action which required him to enclose a portion of his land with a wire fence on the grounds that it was

an

unconstitutional taking of property without compensation. Even though the regulatory action imposed other even more severe restrictions on petitioner's use of his land (such as a restriction on use of the land for mining and a requirement as to certain berin and slope thereon the Supreme Court found that the regulation was not "so one: ous as to constitute a taking which constitutionally require [d] compensation." Id. at 594. So, too, here we find that the classification of P-103 did not sufficiently in

terfere with Radioptics' property rights in P-103 to constitute a taking under the fifth amendment for which Radioptics is entitled to compensation.

This conclusion is fortified by the fact that the purpose behind the statute authorizing classification was to assure the common defense and security of the nation. See 42 U.S.C. §2161. This court has pointed out in Franco Italian Packaging Co. v. United States, 130 Ct. Cl. 736, 745-46. 128 F.Supp. 408, 414 (1955), that where the purpose of a regulation which causes interference with property rights is to prevent injury to the public welfare as opposed to merely bestowing upon the public a nonessential benefit. compensation under the fifth amendment is not required.

Thus, the purpose of the security classification, as well as the minimal extent of its interference with Radioptics property rights, militate against a finding that compensation is owing Radioptics under the fifth amendment for the mere act of classification of P-103 or the failure to declassify it at its own behest.

Even if the security classification constituted a taking, recovery would be barred by the 6-year statute of limitations." Radioptics was notified in 1963 that P-103 was classified, but suit was not brought in this court until 1975. The interval of 12 years is not only ground for invoking the statute of limitations. but also may be sufficient to support a defense of laches.

[5] Radioptics argues that, in any event, compensation is due under the fifth amendment by reason of the express provisions of the Atomic Energy Act of 1954. In support of this argument, Radioptics cites 42 U.S.C. §2181. In that section, however, only

"See 28 U.S.C. §2501.

"$2181 states: "Inventions relating to atomic weapons, and filing of reports Denial of patent;

revocation of prior patents.

"(a) No patent shall hereafter be granted for any invention or discovery which is useful solely in the utilization of special nuclear material or atomic energy in an atomic weapon. Any patent granted for any such invention or discovery is revoked, and just compensation shall be made therefor.

"(b) No patent hereafter granted shall confer any rights with respect to any invention or discovery to the extent that such invention or discovery is used in the utilization of special nuclear material or atomic energy in atomic weapons. Any rights conferred by any patent heretofore granted for any invention or discovery are revoked to the extent that such invention or discovery is so used, and just compensation shall be made therefore.

204 USPQ

paragraphs (a) and (b)" provide for compensation, and then only where there has been a revocation of existing patent rights. In the present case, security classification of P-103 did not effectuate revocation of any existing patent rights owned by Radioptics, since Radioptics never filed an application for a patent on any of the matters disclosed in P-103. Thus, we fail to see how section 2181 provides a basis upon which Radioptics is entitled to recovery.

[6] The only other section of the Atomic Energy Act potentially applicable to this case is 42 U.S.C. §2187(b)(3) which permits compensation to be awarded to any person making a discovery useful in the production of special nuclear material upon application to the Commission. Radioptics never filed an application for compensation

(c) Any person who has made or hereafter makes any invention or discovery useful in the production or utilization of special nuclear material or atomic energy, shall file with the Commission a report containing a complete description thereof unless such invention or discovery is described in an application for a patent filed with the Commissioner of Patents by such person within the time required for the filing of such report. The report covering any such invention or discovery shall be filed on or before the one hundred and eightieth day after such person first discovers or first has reason to believe that such invention or discovery is useful in such production or utilization.

(d) The Commissioner of Patents shall notify the commission of all applications for patents heretofore or hereafter filed which, in his opinion, disclose inventions or discoveries required to be reported under subsection (c) of this section. and shall provide the Commission access to all such applications.

(e) Reports filed pursuant to subsection (c) of this section, and applications to which access is provided under subsection (d) of this section. shall be kept in confidence by the Commission, and no information concerning the same given without authority of the inventor or owner unless necessary to carry out the provisions of any Act of Congress or in such special circumstances as may be determined by the Commission." Id.

$2187(b)(3) states: "Any person making any invention or discovery useful in the production or utilization of special nuclear material or atomic energy, who is not entitled to compensation or a royalty therefor under this chapter and who has complied with the provisions of section 2181(c) of this title may make application to Commission for, and the Commission m grant, an award. The Commission may also upon the recommendation of the General Advisory Committee. and with the approval of the President. grant an award for any especially meritorious contribution to the development, use, or control of atomic energy.

204 USPQ

Under this section and, in any event, Congress has not given this court jurisdiction to provide compensation pursuant to

that statute.

[7] Although the mere classification of P-103 is not sufficient to give rise to a compensable claim under the fifth amendment, Radioptics argues that the AEC's continued maintenance of the proposal in classified status, while failing to accept or reject it until after its contents became publicly known as a consequence of the acts of others, effectively prevented Radioptics from exploiting or protecting the disclosed process in the interim, and that this constituted a taking of a sufficient magnitude to entitle Radioptics to compensation under the fifth amendment.

'We conclude that the failure of the AEC to either accept or reject P-103 in a timely fashion, did not, in any way, deprive Radioptics of its property rights in P-103. Apparently, Radioptics was not interested in exploiting those rights except through AEC, else it would have sought permission to exercise those rights through others.

Radioptics further argues that this alleged taking was aggravated when, during the period of time in which P-103 was still in classified status, the AEC declassified a U.S. patent application" which contains disclosure material almost identical to that set forth in P-103. This declassification, Radioptics argues, had a two-fold detrimental effect: First, by removing classification encumbrances from the patent application, the owner of the application was given a competitive edge over Radioptics and, second, the public disclosure resulting from the issuance of the patent totally destroyed any remaining value in the contents of P-103.

[8] Although declassification of the Levy, et al. patent application may have had a detrimental effect on plaintiff's property rights in P-103 when the patent subsequently issued in 1973, it is well established in the law of trade secrets that the public is at liberty to discover trade secrets by fair and legitimate means and, upon discovery, use the subject matter with impunity. See, e.g., E.I. DuPont de Nemours Co. v. United States, 153 Ct. Cl. 274, 286, 288 F.2d 904, 911, 129 USPQ 473, 478 (1961). Thus, although the issuance of the Levy, et al. patent application may have, in fact, rendered Radioptics' property less valuable or even valueless as a trade secret, in the eyes of the

"Levy, et al. application serial No. 25,605, filed March 25, 1970, now patent No. 3,772,519.

879

law there has been no taking of trade secret property." Inasmuch as there has been no taking, there can be no compensation due Radioptics under the fifth amendment.

Whatever minimal competitive disadvantage Radioptics may have suffered as a consequence of declassification of the Levy, et al. patent application. Radioptics could have overcome that disadvantage by exercising the right of declassification of P-103 in accordance with the declassification guideline changes effected in 1967. This it did not do. Thus, it was Radioptics, not the AEC, who was responsible for whatever competitive disparity, if any, which arose between Radioptics and the owners of the Levy, et al. patent application and patent issued thereon. We conclude, therefore, that declassification of the Levy, et al. patent application, without

concurrent

declassification of P-103, did not give rise to a claim for compensation under the fifth amendment.

Radioptics' final argument is that the Government directly used and disclosed to others the process disclosed to the AEC in confidence by Radioptics. for purposes other than evaluation of the proposal, and thus committed a taking of Radioptics' property without compensation in violation of the fifth amendment. However, as pointed out herein, this course of action would give rise to a cause of action, if any, only for breach of an implied contract, rather than for just compensation for an eminent domain taking.

We conclude that Radioptics is not entitled to compensation under the fifth amendment under any view of the facts of this case, in the light of the applicable law. C. Promissory Estoppel

In the absence of express acceptance by the AEC of the terms of the proprietary legend. Radioptics alleges that the Government is liable on a theory of promissory estoppel. Although we have some reservation whether a claim based upon promissory estoppel is within this court's jurisdiction under 28 U.S.C. §1491, the evidence in this case wholly fails to establish the elements of a claim on this basis.

"Even if, for example, Radioptics had filed an application for patent and both Levy, et al. and Radioptics sought declassification and only the Levy, et al. application was declassified, it is still doubtful if there could be said to have been a "taking" of the Radioptics' application.

The essence of Radioptics' claim is that the AEC impliedly pronased that it would not use or disclose to others any of the information contained in P-103 (except for evaluation purposes) by receiving and evaluating the proposal of which the proprietary legend was a part. Even assuming that it can be fairly said that the AEC, expressly or impliedly, ever made such a promise, the evidence fails to establish that the AEC ever breached such a promise Moreover, in order for the theory of promissory estoppel to apply, a plaintiff must demonstrate that, in reliance upon the alleged promise of the defendant, plaintiff acted in a manner which the promisor ,should have reasonably expected and was damaged by the promisor's breach of the promise. In the present case. Radioptics claims that it refrained from applying for a patent or otherwise exploiting the process disclosed in P-103, to its detriment. in reliance upon defendant's promise not to use or disclose to others the information contained in P-103 except for the purpose of evaluating the proposal. To the extent that Radioptics actually refrained from exercising its available rights, we find that there was no reasonable expectation by the AEC that Radioptics would be, or was, in any way obligated to refrain from using the information for its own purposes. The promise which the Government had allegedly made could not, in any event, have prevented independent discovery by others of the process disclosed by P-103, and such independent discovery could have destroyed any value P-103 might have had. For Radioptics. then, to have refrained from exploiting the P-103 process on the basis of such an assumed promise was, therefore. wholly at its own risk.

Nevertheless, Radioptics claims that it "relied" on AEC's implied promise in refraining from making any other use of its information because the AEC was the only potential customer, and that if the AEC was not interested in P-103, no one else could be. The problem with this argument is that it is self-defeating. If AEC was the only potential customer, the information would be useless in the hands of others. Accordingly, Radioptics would not be damaged by disclosure to others. We find the doctrine of promissory estoppel inapplicable to the present case. D. Misappropriation of a Trade Secret

[9] Misappropriation of a trade secret is a tort and, as such, this court is without jurisdiction to grant relief on such a claim, see Schillinger v. United States, 155 U.S.

204 USPQ

163 (1894); McCreery v. United States, 161 Ct. Cl. 484 (1963). Accordingly, we express no opinion on the merits, if any, of this allegation.

VI. Summary

In rendering judgment in this case, we have assumed that Radioptics had a property right in the contents of P-103 which was subject to legal protection under appropriate circumstances. We hold, however, that the facts of this case fail to warrant recovery either for a taking of Radioptics property for public use without compensation under the fifth amendment or for breach of contract. Accordingly, judgment is entered for the defendant, and the petition is dismissed.

Findings of fact omitted.]

Supreme Court of the United States
Dawson Chemical Co.
v. Rohm and Haas Co.

No. 79-669
Decided Jan. 7, 1980

Petition for writ of certiorari to Court of Appeals for Fifth Circuit granted. Opinion below: 203 USPQ 1.

Supreme Court of the United States

Handgards. Inc.
v. Ethicon, Inc.

No. 79-519

Decided Jan. 7, 1980

Petition for writ of certiorari to Court of Appeals for Ninth Circuit denied.

Opinion below: 202 USPQ 342.